How do I know how much renters insurance to buy? | State Farm®
You’ve followed your rental guide and it’s time to move! your furniture is in place, the utilities are connected, and your rental unit is beginning to resemble a home. Is renters insurance next on your to-do list? If you answered no, you are not alone. According to Independent Insurance Adjusters & brokers of america (iiaba), nearly two-thirds of residential renters in the united states do not have renters insurance.
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However, a renters policy is more important, accessible, and affordable than you think, and in some cases, landlords require renters insurance. But renters are often unclear on what renters insurance is, what it covers, and how much they need.
Reading: How much should i get for renters insurance
what does renters insurance cover?
In short, renters insurance covers what you own. Most homeowners insurance covers only the building and damage caused by negligence. Coverage for some of the most common causes of property damage and loss, such as theft, vandalism, and fire, is entirely up to you. Without renters insurance, you may have to bear the financial burden of a loss on your own, including the cost of a hotel stay if you can’t live in your apartment while repairs are being made.
Do you want to protect your things?
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Most tenants’ belongings cost more than they realize. In fact, the average person has more than $35,000 worth of belongings that probably aren’t covered by a landlord’s policy. take a moment to add up the approximate cost of your computer, television, stereo, furniture, jewelry, and clothing. If a fire destroyed your apartment tomorrow, would you have the money to replace it all?
Renters insurance also covers much more than just your personal property. the average policy can include up to $100,000 in liability coverage. That means that in the event of a covered loss, your insurer will help cover the costs if you are responsible for injuring someone else or damaging someone else’s property, including your landlord’s property. furthermore, this coverage applies whether the incident occurred within your residence or elsewhere.
Make sure you’re protected against the unexpected with renters insurance. get a free quote now.
How much renters insurance do I need?
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Renters insurance is relatively inexpensive. According to Independent Insurance Agents and Brokers of America, Inc. (iiaba), the average renters policy costs just $12 a month for up to $30,000 in personal property coverage. that’s solid coverage for less than the cost of a few cups of coffee a week. Here are some tips to help you determine your insurance needs.
- Complete an inventory of your possessions. Personal property coverage is probably the main reason most purchase a renters policy. The coverage will reimburse you for covered damage, loss, or theft of your personal belongings up to a certain dollar amount, so you’ll want to make sure you get that correct amount. Completing a home inventory is a good way to determine how much property coverage you need. This inventory lists your personal possessions, along with details about their age, purchase price or current value, and other identifying information.
- Check with your insurance agent about discounts. Many insurers offer significant discounts if you purchase more than one policy with their company. For renters, this usually means buying auto insurance with a renters policy, but life, business, and other plans may also qualify.
- Choose the right deductible. A deductible is the amount of a covered loss or liability that you pay out of pocket. in other words, it is the amount “deducted” from any payment by your insurer. For example, if a fire causes $1,500 in insured damage to your personal property and your deductible is $500, then your insurer will pay you $1,000.
- Assess your liability. Your renters policy’s liability coverage can protect you if someone is injured in your home. It can also protect you in case you or a family member causes damage to someone else’s property. Some policies will pay defense and court costs in addition to settlement costs. the typical renters insurance policy offers $100,000 in liability coverage. for tenants, this amount is usually enough. however, if you frequently have company in your home or if your assets exceed that amount, you should consider an amount of insurance equal to at least the full value of your assets.
- supplementary coverage if necessary. Please note that your policy will exclude certain risks (such as earthquake and flood losses), limit coverage for some items (such as computers, firearms and cutlery) and may not cover a home business. if you have special insurance needs, talk to your agent about extending the limits or adding separate policies.
Your renters insurance premiums will reflect the deductibles you agree to pay. lower deductibles mean higher premiums; higher deductibles mean lower premiums. Keep in mind that an insurer will not reimburse you for a loss amount that is less than the deductible. This means that if your deductible is $2,000 and you suffer losses of $1,750, then you are fully responsible for those costs, even if the cause of the loss is covered by your policy.
When choosing a deductible, think carefully about the out-of-pocket costs you are willing and able to pay. A disciplined saver can offset the increased risk of a high deductible with cash reserves. others, however, will have to balance the benefit of a higher deductible against the risk of higher out-of-pocket costs.
And finally, remember that the location of your apartment will play a big role in determining your renters insurance rates. prices will vary based on your state, city, and neighborhood. Safer locations can mean lower rates, so renting in a low-crime area near a fire station can save you money. Your rates will also reflect the security of the rental property itself. For example, an older, unrenovated building may be at higher risk for electrical and plumbing problems, and that can mean higher rates. Fortunately, steps as simple as installing smoke detectors and fire extinguishers in your apartment can mean real savings, even if you’re renting an older property.